The King of Recusals: How Ald. Ed Burke’s Private Law Business Intersects With His Public Power

Chicago’s longest-sitting alderman has recused himself 464 times in the last eight years, far more than all other aldermen combined. Following recent federal raids, questions of his conflicts of interest have arisen again.

Dec 26, 2018 12:18 PM Illustration by Solomon Lieberman/BGA, with 2015 photo of Chicago Ald. Ed Burke during a City Council meeting at City Hall by Brian Jackson/Chicago Sun-Times.

The line between embattled Chicago Ald. Edward Burke’s lucrative law practice and his public office is so thin that he has recused himself from hundreds of City Council votes that have sent millions of dollars in benefits to his private clients — from mega bond deals to tiny zoning changes.

Burke’s dual roles as the most powerful alderman on the council and high-end tax attorney for companies with business before the city have played out for decades. But the potential for conflicts of interest have taken on heightened interest after federal investigators raided Burke’s City Hall and ward offices in recent weeks.

An examination of every City Council vote in the last eight years by the Better Government Association and WBEZ — the most comprehensive review of Burke’s record to date — found that Burke has used a parliamentary maneuver to recuse himself a startling 464 times. The comparable total for all 49 other aldermen combined is 108.

In the exquisitely orchestrated rubber-stamp world of City Hall politics, Burke’s recusals were more theater than substance. The outcome of the measures he refrained from voting on were never in doubt and all passed by wide margins.

A BGA/WBEZ examination of Burke’s voting record and his firm’s appeals also found repeated cases where Burke, 14th, the longtime chairman of the council's influential Finance Committee, used the powers of his office to support private clients of his tax appeals firm Klafter & Burke.

He has sponsored ordinances on their behalf, written letters of support to city bureaucrats on his official letterhead and routinely presided over committee debates without first disclosing his dual roles as both the steward of tax dollars and private attorney for companies seeking the city’s approval.

Experts said the overwhelming volume of recusals by Burke paints a portrait of a severely compromised public official.

“His law practice and clients and business interests are so significant that they’re constantly conflicting with the business of the city and his obligations as a public servant,” said Juliet Sorensen, a law professor at Northwestern University and former federal prosecutor in Chicago who wrote a book on public corruption.

In that environment, the clout of an alderman like Burke, who took office in 1969 and is the longest-serving alderman in Chicago history, could be more important than his vote, Sorensen said. “The fact that he himself doesn’t cast a vote doesn’t necessarily mean that he has zero influence on the matter before the council,” Sorensen added.

Loading...

Burke earlier this year, for example, presided over a heated three-hour hearing on a taxpayer subsidy for Illinois’ largest Catholic health system, Presence Health, heaping praise on witnesses and sparring with opponents before announcing his abstention during the roll call vote at the end. The subsidy was approved anyway.

Federal authorities have not revealed what prompted their raids or what materials they sought, though files and computers were seized. But the raids have only intensified the focus on Burke’s two roles.

The list of Burke’s law clients reads like a who’s who of city contractors, real estate developers, banks, and business owners who have received tens of millions of city dollars following actions approved by the council. The benefits to his clients range from bond deals, zoning changes and redevelopment cash to historic landmark designations and even permission to hang a sign over a city sidewalk, records show.

The city’s ethics ordinance appears to only require aldermen to abstain from voting in circumstances where interests conflict. And federal law-enforcement authorities typically save their fire for public officials who are caught explicitly “trading a public action for something of value,” said Renato Mariotti, a former federal prosecutor in Chicago who handled corruption and white-collar crime cases.

“For the feds to prosecute Ald. Ed Burke, they would have to catch him engaging in some sort of quid pro quo,” Mariotti said. “The best way to do that is through a wiretap of some kind.”

Neither Burke, his spokesman nor one of his attorneys, Anton Valukas, returned calls seeking comment. Another one of Burke’s attorneys, Charles Sklarsky, declined to comment.

Immediately following last month’s initial raid, Burke released a one-paragraph statement:

“As you are aware, there have previously been several other investigations such as this,” said Burke, 74, who has never been charged with a crime but has come under the scrutiny of federal agents multiple times. “In every instance we cooperated fully. And in every instance nothing has been found.”

In the 1990s, Burke’s staffing practices at the Finance Committee came under scrutiny as part of a sweeping federal ghost-payrolling investigation called Operation Haunted Hall. The probe netted dozens of convictions, but Burke was never charged.

Atop an exclusive club

Klafter & Burke stands near the top of a cottage industry of law firms in Cook County dedicated primarily to commercial property tax appeals.

A review of all assessment appeals filed since 2010 reveals that Burke’s firm of four lawyers has represented commercial property with a total assessed value of nearly $7.8 billion, winning $1.5 billion in reduced assessments for those properties during that time and resulting in lower tax bills.

Loading...

Privately, competitors have complained for years about how they’ve lost clients to powerful lawmakers such as Burke or longtime Illinois House Speaker Michael Madigan, who also runs a property tax assessment appeals firm named Madigan & Getzendanner.

The expansion of Burke’s law practice has dovetailed with his consolidation of political power.

In recent years, his most prominent client was Trump Tower Chicago, for which Burke reportedly won millions of dollars in tax breaks. Burke recently dropped the account amid growing dismay in Chicago Democratic circles regarding President Donald Trump’s immigration policies.

Others include leading national banks that often need city approvals for a variety of issues. Earlier this year, Burke guided a multibillion-dollar O’Hare International Airport improvement bond deal through the City Council. Three banks that are his private law clients stood to benefit. But Burke didn’t vote himself.

Burke recused himself, invoking “Rule 14,” a council rule that requires aldermen who attend meetings to cast votes unless specifically excused. Rule 14 doesn’t require aldermen to explain why they are abstaining but typically aldermen use the rule when they think they have a real or perceived conflict of interest.

Though such recusals suggest a conflict of interest, Burke didn’t explain what the conflict was, according to recordings of the public meetings on the matter.

But the BGA and WBEZ found that three major financial institutions that are longtime Burke clients filed economic disclosure statements as part of the bond deal — Fifth Third Bank, U.S. Bank and Bank of America. They stand to share in millions of dollars in proceeds from the deal.

Fifth Third Bank is among clients of Klafter & Burke that stand to benefit from a massive bond deal for O’Hare International Airport expansion. The bond deal earlier this year passed through the city Finance Committee headed by Burke. (Manuel Martinez/WBEZ)

An analysis of Cook County documents shows Klafter & Burke has handled 962 tax appeals for the three banks since 2010, largely for bank branches in the city and suburbs. Those appeals knocked nearly $34 million off the assessments of their combined properties.

Executives for all three banks declined to answer questions about why they hired Burke or how they got to be part of the O’Hare deal.

Larry Magnesen, a spokesman for Cincinnati-based Fifth Third Bank, said Jennifer Burke, the alderman’s daughter who also works at Klafter & Burke, handled property tax appeals for the bank. He declined further comment.

Authorization for $4 billion in bonds to expand O’Hare passed through Burke’s Finance Committee in March, with Burke presiding over the meeting and the roll-call vote. Before the 90-minute committee debate on the issue, Burke announced he would “abstain,” which he later did. Two days later, records show, Burke stood on the council floor to move the legislation for a vote before the full council, where he again recused himself, records show. Again, his abstention had no impact on the outcome because the measure passed by a 40-1 margin.

City Council members who chair committees, such as Burke, are typically responsible for introducing legislation on the council floor that emerges from their committees. Records show Burke made the motion for passage of 125 of the 464 measures in which he later recused himself. Records also show Burke has recused himself four times on legislation he sponsored.

Also this year, Burke, as Finance Committee chair, presided over a sharp committee debate regarding a move to grant $5.5 million in city tax subsidies for Catholic-owned Presence Health’s new headquarters in the Loop.

The downtown headquarters of Catholic-owned Presence Health won a $5.5 million city subsidy following approval by the Finance Committee headed by Burke, who also has done legal work for Presence affiliates. (Manuel Martinez/WBEZ)

Many aldermen opposed the subsidies based on the company’s opposition to performing abortions.

On Jan. 12, Burke chaired the contentious three-hour committee hearing in which he backed witnesses supporting Presence and challenged aldermen who opposed the subsidies.

Burke’s critics on the committee said his conduct made clear he favored Presence. Burke cut off Ald. John Arena, 45th, during the debate as Arena launched into probing questions of one Presence witness, according to a transcript of the meeting.

Arena and other opponents said they felt blindsided when Burke casually said after the debate and as the vote was being called that he would abstain from voting because he had done legal work for Presence affiliates and helped one of its hospitals with a 262-bed expansion.

County property records show Klafter & Burke also filed property tax appeals on behalf of one Presence Health property in 2016 and 2017.

Arena said in a recent interview that he and his colleagues were unaware of Burke’s conflict even as Burke guided the debate on Presence.

“You shouldn’t even be participating in the debate and especially not as a chairman, presiding over the debate,” Arena said of Burke.

The measure was approved by the Finance Committee and forwarded to the full council by a 13-7 vote. Days later, Burke once again moved to have the Presence issue voted on by all the aldermen before recusing himself again at the last minute. The measure was approved by a 31-18 vote.

Spokespeople for Presence did not return messages seeking comment.

Lord of the ward

Burke’s potential for conflicts also occurs in his ward, the same Southwest Side area he’s represented for nearly a half-century and where his fortress-like, three-story home in Gage Park looms over his constituents’ bungalows and ranches.

One longtime fixture in that ward has been Rokaitis Towing, which previously hired a lawyer other than Burke for property assessment work, records show.

Rokaitis Towing, which is located in Burke’s 14th Ward, pays the city $300 per year to hang a sign over the public sidewalk thanks to an ordinance Burke sponsored. Burke was hired to do tax work for the towing company the same year the ordinance passed. (Manuel Martinez/WBEZ)

In 2013, however, owner John Rokaitis hired Klafter & Burke to appeal the property assessments on three pieces of land owned by the towing firm. Three months after those appeals were filed, Burke separately sponsored an ordinance in the City Council titled: “Grant(s) of privilege in public way for Rokaitis Industries Inc.”

The one-page ordinance granted Rokaitis permission to hang a new store sign over a public right of way on Archer Avenue for $300 per year.

Unlike in other instances involving clients, Burke did not recuse himself and voted for the measure, which passed the council unanimously.

Rokaitis, now 80 and retired, said he couldn’t remember why he fired his old attorney and hired Burke instead.

“I guess I hired him because I needed that kind of help,” Rokaitis said of Burke’s property appeal work. “I might have hired him because he’s my alderman and I was being supportive — just for that.

“I don’t remember talking to Ed Burke about it, but I don’t remember talking to anybody about it,” Rokaitis said in a telephone interview from his Indiana home. “I remember buying the sign. I remember they filed for permits, but I think the sign company took care of all that.”

He said while the timing might look suspicious to some, there was nothing inappropriate about the arrangement.

“You do for me and I do for you? Never,” Rokaitis said. “That may have happened with others but not in my case, for sure.”

The sign still hangs over the sidewalk.

All of Burke’s clients who were interviewed by the BGA and WBEZ, including Rokaitis, say they hired Burke for his tax expertise and not for his clout at City Hall.

“Yes, we’ve used him. We really don’t know him that well, but he is a great man,” said Michael LaCoco, owner of LaCoco’s Pizza & Wings at 3350 W. 47th St., just around the corner from Rokaitis Towing.

LaCoco first hired Klafter & Burke in 2011, records show. That’s the same year he and his wife went to City Hall looking for a zoning variance to build a speakeasy-themed nightclub called the “Coco Club” on the second floor of their restaurant.

The owners of LoCoco’s Pizza & Wings on the Southwest Side in Burke’s ward sought a zoning variance to open a speakeasy-themed club on the second floor in 2011. That’s the same year they hired Burke to handle their property tax assessment appeal. (Manuel Martinez/WBEZ)

The permission was granted by the city, and the Coco Club opened in 2015, catering to private bachelor parties and hosting live entertainment on the weekends.

Asked about what Burke may have done to help get city permission for the Coco Club to open in the 14th Ward, LaCoco declined to answer.

“Listen, I don’t want to talk about that,” he said.

The club opened the same year Burke also floated a controversial idea to allow topless dancers in cabarets that serve alcohol — a proposal that died with little fanfare. While vocal in his support for the idea, Burke never mentioned he had at least one private client that could have potentially benefited.

The Coco Club advertised burlesque dancers nicknamed “Red Hot Annie,” “Claira Bell” and “Monet MaCabaret” for a New Year’s Eve party that year with performers wearing lingerie.

Also in 2011, another project was developing in Burke’s ward at 5007 S. Lawndale Ave.

A company called Park Place Venture LLC had just taken over a flagging residential development called Park Place Homes, records show. The company bought the already partially developed 14-acre property in 2009 and then hired Klafter & Burke two years later to appeal the property taxes on 61 parcels.

By 2013, Park Place Ventures had drawn up new plans for the rest of the property, proposing 14 three-story buildings with 78 affordable units instead of the 181 units planned by the first developers.

The ordinance the company needed to change the plan sailed through the City Council in November 2013 by 49-0, with Burke recusing himself, records show.

What did not come up in either the floor vote or during the City Council Zoning Committee was Burke’s long history steering the project through City Hall when it was owned by a previous development company that was also his client.

Records show that, as far back as 2007, Burke helped secure up to $7.4 million in taxpayer subsidies for the project when it was owned by former Ald. Ted Mazola of New West Realty and his partners, who were developing the property under a corporation named 5007 Lawndale Corp.

“Please be informed that I fully support a request for Tax Increment Financing (TIF) assistance by 5007 Lawndale Corporation for a new residential development,” Burke wrote on his City Council letterhead to the acting commissioner of the Department of Planning and Development on Aug. 30, 2007. “If you have any questions do not hesitate to call me.”

That redevelopment plan also sailed through City Council in 2007, with Burke recusing himself.

Neither Mazola nor his former partners on the deal returned telephone calls seeking comment. Nor did officials with the new development company, Park Place Venture, LLC.

Author(s)

David Kidwell is the Special Projects Editor at the Better Government Association, where he leads reporting on longer term investigations. Before coming to the BGA, he was an investigative political reporter at the Chicago Tribune where his work examined the public and private worlds of the most powerful public officials in Illinois.